Gold's Quick Recovery From the Correction's Target Is Suspicious

By Rod David  SEP 27, 2012 3:35 PM

Take a look at the intraday action in commodities.

 


The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today’s Highlight: Gold’s quick recovery from the correction’s target is suspicious. Almost any hesitation at extending higher would suggest fresh lows coming in a hurry.

Dollar Basket
Dec Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Gapping down Thursday reacted up from testing the 79.78 sell signal. The reaction up peaked upon testing 80.00 and filling the gap back to Wednesday’s close. The balance of the session trended down to fresh lows, putting into play 79.00 and then lower, assuming that Friday were to confirm with a second consecutive lower close.

Eurodollar
Dec Contract EC; (NYSEARCA:FXE)
Thursday’s price action formed a Pivot Reversal, by probing fresh trend lows intraday that were book-ended by gapping and by closing above the morning’s high. If confirmed by a second consecutive higher close Friday, recovering 1.2920 Thursday now signals that 1.3110 and 1.3200 areas are in-play.

Gold
Dec Contract GC; (NYSEARCA:GLD)
Wednesday’s test of the drop’s 1740.00 target was recovered Thursday to 1783.00. The speed of the correction still seems too fast to fully serve as a correction. That said, a second consecutive higher close would signal the next target at 1814.00 is in-play. But almost any hesitation in extending higher ­ and dipping back under 1770.00 ­ would resume the correction, next targeting 1727.00 and potentially 1717.00.

Silver
Dec Contract SI; (NYSEARCA:SLV)
The weak hands sponsoring the recent dip were made evident by Thursday’s gap up that extended higher intraday. But a second consecutive higher close above 35.00 is still needed to resume the rally, next targeting 35.40 on the way to 36.75.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Thursday’s inside day consolidated Wednesday’s fresh recovery highs. Closing back under 148-28 would trigger at least a correction down to 147-16.

Crude Oil
Nov Contract CL; (NYSEARCA:USO)
Thursday’s open gapped up to immediately test its 91.20 bounce limit. The balance of the session ranged flat-to-higher. A second consecutive higher close would suggest the 89.75 target had held. Otherwise, its retest remains in-play, with potential for extending down to 87.00.

Natural Gas
Nov Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
Thursday’s EIA data triggered a reaction down that was recovered to fresh highs at 3.32. Any higher would all but assure also probing above 3.40, probably on the way to 3.58 and 3.75. Closing under 3.19 would signal momentum reversing down.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
No positions in stocks mentioned.

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